Acceleration is one of those sticky concepts in the building industry, especially within the ambit of the JBCC contract. Contractors, employers, and principal agents habitually find themselves in heated disputes after acceleration deals went askew.
It’s only late in the day when parties realise, the concept of acceleration is an artificial arrangement and doesn’t exist in the JBCC.
In this article, we are going to look at the concept of acceleration and what you need to know, to protect your interests as a contractor or as a principal agent. We also ask the fundamental question: Can the principal agent issue an instruction to accelerate work under the JBCC Contract?
In a JBCC questions and answers session, one contractor sketched a scenario that should be quite familiar to many professionals in the building industry.
This particular contractor suffered delay and provided a notification and later a claim in terms of the JBCC.
The principal agent responded and refused the extension of time claim (EOT).
The reason for refusal was that after scrutinising the programme, the principal agent identified opportunities for acceleration. Some of these opportunities required additional resources but the principal agent also pointed out some opportunities in the programme, where a sequence change could lead to faster completion. The principal agent felt the contractor could implement these sequence changes and resource additions to accelerate work, to the benefit the project and to recoup the claimed delay.
The principal agent also acknowledged that a portion of the proposed acceleration may require additional expense and cost for which the employer was willing to reimburse the contractor.
The principal agent then issued a formal instruction to the contractor to accelerate work and keep the practical completion date fixed.
2 So, what’s the problem?
The principal agent’s instruction may sound very cordial in this instance. You may even wonder why a contractor would not simply follow this amicable arrangement?
But experienced contractors would know we are stepping into a contractual minefield:
3 The contractual minefield that is acceleration
Firstly, it’s not always possible nor practical to speed up work. As an example, extra resources aren’t always available. The contractor’s own resources may be tied up in other projects or the nature of the work may be such that more resources isn’t going to speed it up.
More resources need more control and supervision. With too many resources, everyone’s job can become no one’s job. Also, to use external resources becomes a quality risk.
What happens if the contractor fails to accelerate? Or if the changes in sequence, turn out to have failed, and the project is still delayed? This is the question everyone always side-steps. Yet this is where the proverbial wheels come off, followed by the gloves.
If the contractor fails to accelerate, are they still entitled to claim an EOT or have they now lost that right due to their acceptance of the instruction for acceleration?
What if the contractor did speed up, but there were other delays beyond their reasonable control which prevented completion on time? Do they still retain the right to claim an EOT on these delays?
Should the contractor pay back the acceleration money if they failed to accelerate?
If they fail to accelerate in terms of an instruction what happens if the employer use others to complete the work as is the employer’s entitlement under clause 17?
As you can see, once we step beyond the intended bounds of the JBCC, we are in trouble. Or as my Namibian clients would always say: “we have hit some thick sand”.
There is no contractual definition for acceleration found in JBCC. The word doesn’t even exist in the contract. As a result, the parties are lost in a vast expanse of subjective opinions and common law pitfalls.
It thus begs the question:
4 Can the principal agent issue an instruction to accelerate or change the sequence of the programme to recoup delays?
The fact is, a principal agent (PA) does not enjoy unlimited powers to issue contract instructions.
There is a definite limitation on the powers of a PA to issue contract instructions and this limitation is imposed by the JBCC agreement and common law.
From these restrictions it follows then that the PA is not entitled to issue certain instructions such as:
an instruction to suspend work,
instructions to accelerate work,
nor are they entitled to instruct a contractor about the order in which they are to carry out work.
The contractual limits are clearly set out under sub-clause 17.1 of the JBCC agreement.
From a practical standpoint as mentioned earlier, acceleration is sometimes impossible. So, acceleration cannot be a contractual provision at the PA’s disposal on which a binding instruction can be given.
The PA simply cannot issue an instruction to force the contractor to carry out work in a particular order. Even if there are opportunities in the programme for fast-tracking or changing sequences in a bid to accelerate.
If the employer wishes for work to be carried out in a preferred sequence, it can only be enforced contractually at tender stage.
This could then form part of the terms and conditions of the agreement early on. Also, the contractor would be under an obligation to adhere to these terms as they could have considered its workability, risk and cost as part of their tender.
If no such provisions existed at tender stage, then under the essence of common law, contractors are entitled to programme and execute the work in a manner and order which they prefer and for which they have priced.
Another particularly important point to remember is that contractors cannot lose their right or entitlement to claim for an EOT only because acceleration options exist and are being considered. In other words, the PA cannot unilaterally dispose of the contractor’s right to claim a delay, on the grounds of possible acceleration options. This would require a firm amendment of the standard provisions of the JBCC to enforce as we don’t find any such limitations or conditions under clause 23.
5 What can parties do to protect their interests under these circumstances?
Contractors should reject an acceleration instruction formally in writing. But, do make sure there are no amendments to your agreement where such an instruction is allowed.
If no such provision exists, contractors must inform the principal agent that it is not a valid instruction in terms of the JBCC. Also, they should make clear they have no obligation or intention to proceed with it. If the principal agent disagrees, the parties can refer the matter to dispute resolution.
This does not mean that acceleration is prohibited as an option between parties in a JBCC agreement. Parties can still negotiate and agree on a form of acceleration between them. This can sometimes be a positive negotiation to the benefit of the project. Many contractors also prefer to quote on acceleration rather than claim and EOT, and it can therefore provide a win-win opportunity for both parties if handled correctly.
However, it is important that principal agents appreciate the contractual boundaries and if an acceleration negotiation is contemplated, it is strongly advised to get legal help in drafting an amendment to this effect.
The amendment needs to protect everyone’s interests and clearly stipulate the rules, terms and conditions that would apply in going ahead with the intended acceleration.
6 About the Author
Kobus le Roux is the Managing Director of Le Roux Consulting (Pty) Ltd, a boutique construction consultancy specialising in project scheduling, forensic delay analysis and construction dispute assistance.
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